Managing a business can present a mountain of administrative tasks. From scheduling staff to processing payroll and everything in between, it's hard to get a handle on everything without feeling overwhelmed. Yet, without a birds-eye view of the organisation, you can quickly start to see your profit margins go down and your labour costs go up.
But reducing labour costs to improve profit doesn't mean cutting staff shifts and putting employee morale in the dumps. Instead, more effective ways to reduce your staff labour costs can help improve customer service and employee engagement.
This post reveals how you can reduce labour costs and improve profitability by using rostering software that provides you with an ecosystem of tools to help you manage your staff better.
Predictive Scheduling
If you manage a team of hourly workers, you know how difficult it is to predict their schedules. Predictive scheduling is when you notify employees of when scheduled to work in advance. The practice benefits part-time employees with fluctuating schedules and full-time employees who need to manage their cash flow. Either way, it allows your employees to maintain a healthy lifestyle and avoids distress.
While it's helping improve employee morale, it can also help your business save money because it reduces the number of employees who don't show or don't answer when you call. When staff don't show up for a shift, it decreases sales and drives labour costs. Because staff loyalty becomes stronger with predictive scheduling, you also don't have to wear the cost of employee turnover. With a decreased turnover, your staff are better trained and more engaged, leading to a higher success rate.
To master the art of predictive scheduling, consider a digital scheduling software like RosterElf. With RosterElf, you can build rosters, save roster templates and notify your staff of schedules from one place.
Reduce Time Theft
Time theft occurs when employees are paid for any time they didn't work. It can be intentional when an employee adds additional hours to their timesheet or unintentional when an employee forgets to clock out for a break. With time theft costing US employers $11 billion a year, 1 in 2 employees admit to adding between 15 and 60 minutes to their timesheets. But it's not always their fault. Most of the time, it's a flaw in the time tracking system the company is using.
If a staff member doesn't know exactly when they started their shift, it's easy to fudge the numbers. To reduce time theft, businesses must consider a reliable way to track their employee's time. With a digital scheduling solution like RosterElf, staff can digitally clock in and out, leave a reason for late or working overtime, and managers can approve hours at the end of each shift.
This gives you complete transparency into when your employees are on the floor and keeps you fair work compliant by avoiding overtime and ensuring staff are taking breaks when required.
Automatically calculate awards
If you manage a business with part-time, full-time and casual employees, you likely know the headache of calculating awards too well. The Fair Work Australia website lists all 122 awards that outline the terms for pay and conditions for workers in Australia. Depending on the business, you can be subject to more than one award. Awards cover part-time, full-time and casual employees and include base pay, overtime, penalties and allowances.
- Base pay is the rate of compensation that an employee receives in exchange for working. It doesn't include any benefits, bonuses or raises. It includes hourly, weekly and monthly rates.
- Overtime and penalties refer to any work an employee does outside the regular work hours. These times can include working on Sundays, Public holidays or late night shifts.
- Allowances compensate employees who incur expenses while on the job or working in unfavourable conditions. Standard allowances include uniform/clothing, travel, meals and accommodation. To understand which allowances apply to your business, visit Fair Work.
Consider a rostering software that also provides automatic award calculation when processing payroll to save the stress of paying the cost of not applying awards. RosterElf ensures that you allocate the correct award entitlements to each employee and automates the wage calculations when you process payroll. You can also see wage calculations as you roster staff to keep you on budget.
Schedule based on budget and trends
If you run a Restaurant or a Retail store, you're probably familiar with either scheduling too many staff when things are slow or not enough staff when things are unexpectedly busy. In either case, when you don't plan properly, you can hurt your profit margins and future sales.
To start, you want to choose a workforce management tool that can give you insight into vital metrics that will help you be smarter when scheduling. It should include things like sales, wage costs and labour percentage. These things can give you trends across your business to make more informed decisions when you have a lot on your plate.
Once you have an idea of trends within your business, you can start to schedule around them using a budgeting tool. With RosterElf's online scheduling software, a live budgeting tool is built directly into the rostering feature. As you add employees to the schedule, you can see how it affects your weekly budget. You can then adjust shifts to ensure you're hitting your wage and labour budget every time.
Reducing costs starts from within
When you can incentivise employees and make an effort to communicate with them often, you're empowering your staff to be more productive. Increased productivity across the team means better sales, higher profit margins, and employee morale that keep your staff from leaving. But to manage it all, you need the right technology that empowers you as a manager to make smarter decisions and helps you make more time for the things that matter.
Sign up for your free trial of RosterElf today to start reducing labour costs and building a more efficient business.
